SYDNEY- Australia’s unemployment rate ticked higher in January even though job creation handily outpaced forecasts, data showed on Thursday, a mixed outcome that does little to clarify the outlook for further cuts in interest rates.
Figures from the Australian Bureau of Statistics showed net employment rose 44,300 in January from December, when it jumped 60,000. That was well above market forecasts for a 20,000 rise, and all of the gains came in full-time employment, which climbed by 54,100.
Annual jobs growth accelerated further to a blistering 3.5 percent, more than twice the pace seen in the United States.
The jobless rate still nudged up to 4.1 percent, from 4.0 percent, as the workforce expanded by even more than the increase in jobs. This was largely due to more women looking for work and finding jobs, which lifted the participation rate to a record high of 67.3 percent.
The ABS noted a pattern had emerged since the pandemic where an unusually large number of people were not employed in January but expected to start a job in the near future.
This phenomenon tended to see the unemployment rate rise in January, only to fall back in February.
“The uptick in joblessness overstates the extent to which the job market loosened last month,” said Abhijit Surya, a senior economist at Capital Economics.
“The tight labor market reinforces our view that the RBA will deliver a shallow easing cycle.”
The Reserve Bank of Australia this week trimmed its cash rate by 25 basis points to 4.10 percent, but cautioned further easing could not be guaranteed given upside risks to inflation.
